The Bangladesh Shilpa Bank (BSB) and the Bangladesh Shilpa Rin Sangstha (BSRS) are going to merge into one organization under a new name Bangladesh Development Bank.
The finance ministry sent last month a proposal on the matter to the secretary committee on administrative development.
A draft of Memorandum and Articles of Association on establishing a public limited company named Bangladesh Development Bank Limited was also sent to this body.
A senior official of the ministry said the proposal will be sent for the cabinet's nod after its scrutiny by this committee.
According to the proposal, Bangladesh Development Bank will be a public limited company under state ownership.
The official, however, said this bank might gradually be privatized.
The paid-up capital of the merged company will amount to Tk 400 crore. The present paid-up capital of the BSB is Tk 200 crore and BSRS' Tk 70 crore. Such capital will be raised to Tk 400 crore through an adjustment of the reserve funds of the two companies.
The proposed Bangladesh Development Bank will have at least seven directors.
In 1992, the government's several initiatives to privatize BSRS could not be accomplished due to some complexities.
BSB and BSRS, which have almost similar functions, were established to provide loans and facilities to industrial institutions besides helping in setting up new industries and expanding investment in the country. But, these two companies, according to the finance ministry official, failed to live up to their expectations.
In a recent meeting, representatives from the law ministry, Bangladesh Bank, BSB and BSRS emphasized making these two state-run lending agencies stronger and agreed on a merger.
An official sought that the government immediately take a decision with regard to the fate of the company because any uncertain situation will disappoint the employees of the companies.
Source: The Daily Star, November 13, 2008
